Which Statement Is a Reason for Governments Imposing or Maintaining

question 54

Multiple Choice

Which statement is a reason for governments imposing or maintaining price controls?

• A)Some consumers and producers can benefit from price controls.
• B)Price controls prevent the deadweight loss that occurs when the market is in equilibrium.
• C)The government earns revenue from price controls.
• D)Price controls improve the efficiency of the market.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which may not reflect its market value.

Semiannual

Occurring twice a year; a term often used in the context of interest payments, dividends, or certain financial reporting periods.

Interest Expense

The cost incurred by an entity for borrowed funds, frequently appearing as a line item on the income statement.

Market Rate

The prevailing interest rate available in the marketplace for securities or loans, varying with the demand, supply, and risk.